The expanded PEA will include mine plans for six resource areas and incorporate data from a total of 128,000 meters of drilling from 511 drill holes including 139 new core holes totaling 37,925 meters completed during 2011 and the first half of 2012. The PEA is being prepared by Metal Mining Consultants Inc., Colorado (http://www.metalminingconsultants.com), formerly Scott E. Wilson Consulting Inc., a respected engineering team with experience in mid-size projects like San Miguel.

The resource estimate for the PEA was prepared by Mine Development Associates (MDA, www.mda.com) of Reno, Nevada (see news release of October 10, 2012). The estimate reports 639,000 ounces of gold in the indicated category and another 830,000 ounces of gold classified as inferred. For silver, indicated resources are now estimated at 53.6 million ounces plus an additional 46.2 million ounces of inferred. Based on the long term gold-to-silver price ratio used by MDA of 1-to-60, the San Miguel estimated resource now equates to 1.53 million indicated gold equivalent (AuEq) ounces and 1.60 million inferred gold equivalent ounces (see table below for details). The PEA will incorporate inferred resources in its mine plans. Inferred resources are speculative in nature and economic projections based on them may not be reliable.

The PEA will also incorporate data from a comprehensive metallurgical test program conducted by McClelland Laboratories (http://www.mettest.com/mliindex.htm) of Reno, Nevada using composite samples prepared by ALS Chemex of Chihuahua, Mexico. The results predict high recoveries of gold and silver from either a milling/cyanide leach or conventional milling/flotation process (see news release of October 22, 2012).

With the best deposits remaining open, drilling continues with the aim of adding additional resources in the near term. New drilling on Don Ese is extending the mineralized structure at depth. Additional sampling and mapping has extended surface continuity of the high grade San Miguel Vein for at least another 1.5 kilometers to the northwest; this target is expected to be drilled shortly. Definition drilling is also planned at La Bavisa (in the Don Ese area) where recent drilling has encountered high grade intercepts which have not been incorporated into resource estimates. Drill results will be released shortly.

NI 43-101 Disclosure

Exploration activities at San Miguel are being conducted by Paramount Gold de Mexico S.A de C.V personnel under the supervision of Glen van Treek, Exploration Vice President of the Company and Bill Threlkeld, a Qualified Person as defined by National Instrument 43-101, who have both reviewed and approved this press release. An ongoing quality control/quality assurance protocol is being employed for the drill program including blank, duplicate and reference standards in every batch of assays. Cross-check analyses are being conducted at a second external laboratory on 10% of the samples. Samples are being assayed at ALS Chemex, Vancouver, B.C., using fire assay atomic absorption methods for gold and aqua regia digestion ICP methods for other elements.

About Paramount Gold

Paramount is a U.S.-based exploration and development company with multi-million ounce advanced stage precious metals projects in Nevada (Sleeper) and northern Mexico (San Miguel). Fully funded exploration and engineering programs are now in progress at these two core projects are expected to generate substantial additional value for our shareholders.

The Sleeper Gold Project is located off a main highway about 25 miles from the town of Winnemucca. In 2010, Paramount acquired a 100% interest in the project including the original Sleeper high-grade open pit mine operated by Amax Gold from 1986 to 1996 as well as staked and purchased lands now totaling 2,570 claims and covering about 47,500 acres stretching south down trend to Newmont's Sandman project. This acquisition is consistent with the Company's strategy of district-scale exploration near infrastructure in established mining camps.

The San Miguel Project consists of over 142,000 hectares (over 353,000 acres) in the Palmarejo District of northwest Mexico, making Paramount the largest claim holder in this rapidly growing precious metals mining camp. The San Miguel Project is ideally situated near established, low cost production where the infrastructure already exists for early, cost-effective exploitation. A PEA for San Miguel is now in progress.

Summary of all PZG NI 43-101 Compliant Resource Estimates

MEASURED AND INDICATED RESOURCES

PROJECT

Tonnes

Au g/T

Au Ounces

Ag g/T

Ag Ounces

San Miguel

23,918,000

0.83

639,000

70.0

53,559,000

Sleeper

326,963,000

0.33

3,479,000

3.86

40,606,000

Total

4,118,000

94,165,000

INFERRED RESOURCES

PROJECT

Tonnes

Au g/T

Au Ounces

Ag g/T

Ag Ounces

San Miguel

37,470,000

0.69

830,000

38.00

46,243,000

Sleeper

223,624,000

0.27

1,972,000

2.84

20,450,000

Total

2,802,000

66,693,000

Mineral resources that are not mineral reserves do not have demonstrated economic viability.

Cautionary Note to U.S. Investors Concerning Estimates of Indicated and Inferred Resources

This news release uses the terms "measured and indicated resources" and "inferred resources". We advise U.S. investors that while these terms are defined in, and permitted by, Canadian regulations, these terms are not defined terms under SEC Industry Guide 7 and not normally permitted to be used in reports and registration statements filed with the SEC. "Inferred resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of a feasibility study or prefeasibility studies, except in rare cases. The SEC normally only permits issuers to report mineralization that does not constitute SEC Industry Guide 7 compliant "reserves", as in-place tonnage and grade without reference to unit measures. U.S. investors are cautioned not to assume that any part or all of mineral deposits in this category will ever be converted into reserves. U.S. investors are cautioned not to assume that any part or all of an inferred resource exists or is economically or legally minable.

Safe Harbor for Forward-Looking Statements

This release and related documents may include "forward-looking statements" including, but not limited to: statements related to the interpretation of drilling results and potential mineralization; the expected release of results of a Preliminary Economic Assessment, the timing of such a release and the accuracy of such results; and the accuracy and reliability of projections contained in mineral resource estimates. Forward-looking statements are statements that are not historical fact and are subject to a variety of risks and uncertainties which could cause actual events to differ materially from those reflected in the forward-looking statements including fluctuations in the price of gold, inability to complete drill programs on time and on budget, and future financing ability. Paramount's future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and other applicable securities laws. Words such as "believes" "plans" "anticipates" "expects" "estimates" and similar expressions should also be considered to be forward-looking statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including, but not limited to: uncertainties involving interpretation of drilling results, environmental matters, lack of ability to obtain required permitting, equipment breakdown or disruptions, and the other factors described in Paramount's Annual Report on Form 10-K for the year ended June 30, 2012 and its most recent quarterly reports filed with the SEC. Except as required by applicable law, Paramount disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this document.